THQ In Financial Trouble

The world did not end on December 21, 2012, but the year proved devastating for a number of visual effects, animation, and game studios. The most recent victim: THQ.

Days before the Christmas holiday, THQ, a force in the gaming industry, filed bankruptcy.

Reports from the financial sector state that the company's stock tumbling to just 36 cents a share following the announcement.

Meanwhile, on the THQ Web site, company President Jason Rubin announced that the company has secured an investor, the private equity firm Clearlake Capital Group, "which is interested in purchasing most of what you think makes up THQ: the teams that make the games (Relic, THQ Montreal, Vigil, and Volition), THQ's Intellectual Property (titles, source code, etc.), THQ's contracts (like the ones with Crytek, South Park Digital Studios, 4A games, Obsidian, and Turtle Rock), and the support staf that are required to help the teams success."

To that end, Clearlake has submitted a bid of $60 million. The hope is to get higher bids. Financing from Clearlake and Wells Fargo will help keep THQ operational so it can continue working on the various titles under development until "the process plays itself out," Rubin stated in his letter to the THQ community. "In short, they are investing in a new start for our company."

"Chapter 11 does not mean the end of the THQ story or the end of the titles you love. Quite the opposite is true, actually. Rest assured that the goal throughout the sale process has been to preserve our teams and our products. So no matter what the outcome in 30 days, as long as we have accomplished this goal, I will be satisfied," stated Rubin.

He further explained that the Chapter 11 process allows for other bidders to make competing offers for THQ.

Founded in 1989 in the US, THQ develops titles for consoles, handhelds, PCs, and wireless devices. Among its games are Saints Row and
Red Faction, in addition to WWE, Nickelodeon, Disney, and Pixar branded games. Since then, the company has experienced some ups and downs. In the 2006, it acquired Vigil Games, and the next year reported its highest annual sales figures and net profits ever. A little over a year later, it closed five of its internal studios. In 2009, some of its big games did not pan out, leaving the company vulnerable, resulting in the spin-off of two studios. THQ also sold off its Big Huge Games group to 38 Studios, founded in 2006 by Boston Red Sox player Curt Schilling. (That studio folded in early 2012.)

The facility has locations in North America, Europe, and Asia-Pacific. Its headquarters is in Agoura Hills, California. The company's 2011 revenue was reported at $665 million.

At this time, THQ has a number of games under development, and the plan is to continue working on them. They include: Metro: Last Light (PlayStation 3, Xbox 360, Windows),
Company of Heroes (Windows),
South Park: The Stick of Truth (Xbox 360, PlayStation 3, Windows),
Saints Row 4 (PlaySation 3, Xbox 360, Windows), and
WWE '14 (Xbox 360, Wii, PlayStation 3, PS Vita, Wii U).

Rubin is confident the teams and products will end up together and in good hands.

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